Nonresident Owner Florida Rental Tax: The US Federal Basics

How is rent from a Florida property taxed when the owner is a nonresident alien?

The IRS states a default of 30%, or a lower treaty rate, for a nonresident alien where the income is not effectively connected with a US trade or business: "In general, income from real property located in the United States (U.S.) that is owned by a nonresident alien (NRA) is taxed at a 30% (or lower treaty rate) if it is not effectively connected with a U.S. trade or business."

Collection is by withholding: "The tax is generally withheld (NRA withholding) from the payment made to the foreign person." Publication 515 (2026) then gives the rule for computing the amount withheld: "You must withhold on the gross amount subject to chapter 3 withholding. You cannot reduce the gross amount by any deductions."

Those are two distinct rules: the second governs the withholding computation. What an owner's liability is ultimately figured on, which deductions are available, and whether the rent is effectively connected income at all, are separate questions for a qualified tax professional.

What does the IRC 871(d) election change?

It moves the income onto a net basis at graduated rates: "If an NRA makes the timely election, the NRA can claim deductions attributable to the real property income, and the NRA’s net income from real property is taxed at graduated rates." How the election is made, how long it lasts and how it is revoked are set out in their own section below.

The election is described this way, with the IRS's own wording intact: "If an NRA owns or holds in interest in real property located in the U.S. and holds the property for the production of income, then the NRA can elect under Internal Revenue Code (IRC) 871(d) to treat all income from U.S. real property as effectively connected income with the conduct of a trade or business in the U.S." The same passage adds that "This includes income from rents …". Which regime produces a better result depends on facts only a qualified tax professional can examine.

How is the election made, how long does it last, and how is it revoked?

The election is made in a written statement. The IRS page: "As provided in Treasury Regulation 1.871-10(d)(1), an NRA makes the initial election by attaching a statement to their income tax return, Form 1040-NR, U.S. Nonresident Alien Income Tax Return, or on an amended income tax return, Form 1040-X, Amended U.S. Individual Income Tax Return, for the year of the election." (IRS, Nonresident aliens – Real property located in the U.S.) The form's instructions list what that statement must include, among other things: "A complete list of all of your real property, or any interest in real property, located in the United States (including location)." "The extent of your ownership in the real property." "A description of any substantial improvements to the property." "The dates you owned the property." (IRS, Instructions for Form 1040-NR) The IRS page lists more, and the full list is in 26 CFR 1.871-10(d)(1)(ii). The same regulation says when the initial election can be made: "at any time before the expiration of the period prescribed by section 6511(a), or by section 6511(c) if the period for assessment is extended by agreement, for filing a claim for credit or refund of the tax imposed by chapter 1 of the Code for such taxable year." (26 CFR 1.871-10(d)(1)(i)).

Once made, it lasts. The Code: "An election under this paragraph for any taxable year shall remain in effect for all subsequent taxable years, except that it may be revoked with the consent of the Secretary with respect to any taxable year." (26 U.S.C. § 871(d)(1)). The Form 1040-NR instructions put it this way: "Once made, the section 871 election will remain in effect until revoked with the consent of the Commissioner. A new section 871 election may not be made until after the fifth year in which the revocation occurs." (IRS, Instructions for Form 1040-NR) The Code gives that period with its proviso: after a revocation, "a new election may not be made under such paragraph for any taxable year before the 5th taxable year which begins after the first taxable year for which such revocation is effective, unless the Secretary consents to such new election." (26 U.S.C. § 871(d)(2)). The regulation, 26 CFR 1.871-10, says which revocations that period applies to.

On revocation the IRS's sources do not say the same thing in the same words, and this page does not reduce them to one rule. The IRS page says: "An NRA can revoke the election without IRS approval by filing Form 1040-X for the year the NRA made the election, and for later tax years." It sets the time: "The NRA must file Form 1040-X within 3 years from the date the original return was filed, or 2 years from the time the tax was paid, whichever is later." "If this time period has expired for the year of election, the NRA cannot revoke the election for that year." And it adds: "The election may be revoked for later tax years only if IRS approval is received." (IRS, Nonresident aliens – Real property located in the U.S.) The regulation, 26 CFR 1.871-10, paragraph (d), is where the whole rule is: it distinguishes revocation within the time in which that year's election can still be made, without consent, from later revocation, which requires the Commissioner's consent. A request for that consent is made in writing: "It must specify the taxable year for which the revocation or new election is to be effective and shall be filed within 75 days after the close of the first taxable year for which it is desired to make the change." (26 CFR 1.871-10(d)(2)(iii)). Which of these applies to a given year is for a qualified tax professional.

What is Form W-8 ECI, and who receives it?

Form W-8 ECI is the certificate a foreign owner gives to the withholding agent or payer: "You must give Form W-8 ECI to the withholding agent or payer if you are a foreign person and you are the beneficial owner of U.S. source income that is (or is deemed to be) effectively connected with the conduct of a trade or business within the United States."

Where the IRC 871(d) election is in play, the form "is required to be given to any withholding agent or payer by the NRA in the first year the IRC 871(d) election is made and in any subsequent year when required." Providing it means the NRA is certifying "under penalties of perjury that the rental income is effectively connected income with a U.S. trade or business …" That certification belongs with a qualified tax professional. Flexway does not prepare or advise on the form, and takes no position on who the withholding agent is.

Which US return does the election require, and for how long?

It requires Form 1040-NR, and not only once: a nonresident alien who makes a valid election under IRC 871(d) to treat rental income as effectively connected income must file that return "for the year the election is first made and for every subsequent year until the election is revoked."

Form 1040-NR is the U.S. Nonresident Alien Income Tax Return, which the IRS lists among the returns a person may need to file if they "Were a nonresident alien engaged in a trade or business in the United States." The due dates the IRS has published are those of the 2025 return: "If you are an employee and you receive wages subject to U.S. income tax withholding, you will generally file by the 15th day of the 4th month after your tax year ends. For the 2025 calendar year, file your return by April 15, 2026." "If you are not an employee who receives wages subject to U.S. income tax withholding, you must file by the 15th day of the 6th month after your tax year ends. For the 2025 calendar year, file your return by June 15, 2026." (IRS, Publication 519) The dates of the 2026 return are not yet published in any of these sources, so the calendar for a later year belongs to a qualified tax professional.

Without the election, Publication 519 gives an example: an owner who is not engaged in a U.S. trade or business, whose only U.S. source income is the rent of a single-family house, and who received a Form 1042-S showing that the tenants properly withheld the tax. "You do not have to file a U.S. tax return (Form 1040-NR) because your U.S. tax liability is satisfied by the withholding of tax." (IRS, Publication 519) The example holds for those facts. The same publication lists who must file a return. The first on its list is "A nonresident alien individual engaged or considered to be engaged in a trade or business in the United States during 2025.", of whom it says: "You must file even if:" "Your income did not come from a trade or business conducted in the United States," "You have no income from U.S. sources, or" "Your income is exempt from income tax." It then gives three exceptions, each with conditions of its own: for a student, teacher or trainee on an F, J, M or Q visa; for a student or business apprentice under the income tax treaty with India; and for a partner in a U.S. partnership that was not engaged in a trade or business in the United States. The second on the list is "A nonresident alien individual not engaged in a trade or business in the United States with U.S. income on which the tax liability was not satisfied by the withholding of tax at the source." And it adds: "You must also file if you want to:" "Claim a refund of overwithheld or overpaid tax, or" "Claim the benefit of any deductions or credits." (IRS, Publication 519)

What happens if the return is filed more than 16 months late?

Unless the IRS grants a waiver, deductions and certain credits become unavailable: "An NRA who does not file within sixteen (16) months of the original due date (without regard to extensions of time to file), is not permitted to claim deductions from gross income and is ineligible to claim certain credits, unless the IRS grants a waiver." (IRS, Nonresident aliens – Real property located in the U.S.) That sentence gives one line. For an owner who did not file a return for the year before, the line can fall earlier, as the next paragraph says.

Publication 519 says when a return is timely for this purpose, in two parts: "To get the benefit of any allowable deductions or credits, you must timely file a true and accurate return. For this purpose, a return is timely if it is filed within 16 months of the due date just discussed." "However, if you did not file a 2024 tax return and 2025 is not the first year for which you are required to file one, your 2025 return is timely for this purpose if it is filed by the earlier of:" "The date that is 16 months after the due date for filing your 2025 return, or" "The date the IRS notifies you that your 2025 return has not been filed and that you cannot claim certain deductions and credits." (IRS, Publication 519) The IRS page says the sixteen months run "without regard to extensions of time to file" (IRS, Nonresident aliens – Real property located in the U.S.), so an extension does not move the date the clock is measured from. Publication 519 adds: "The allowance of the following credits is not affected by this time requirement." It lists three, and the first is "Credit for withheld taxes." (IRS, Publication 519) And the IRS may waive the time limit on the conditions set by 26 CFR 1.874-1. A qualified tax professional can review past years and advise on what to file and by when.

What is an ITIN, and who needs one?

An ITIN is a federal tax number for people ineligible for a Social Security number: "An ITIN is a 9-digit number the IRS issues if you need a U.S. taxpayer identification number for federal tax purposes, but you aren’t eligible for a Social Security number (SSN)." The IRS test: "You need an ITIN if you have a federal tax purpose and you’re not eligible for an SSN."

Its scope is narrow: "An ITIN is issued by the IRS for federal tax purposes only." The IRS lists four things it does not do: "Qualify you for Social Security benefits or the Earned Income Tax Credit", "Provide or change immigration status", "Authorize you to work legally in the U.S.", and "Serve as identification outside the federal tax system". Whether a given owner has a federal tax purpose is for a qualified tax professional to determine.

Does FIRPTA withholding apply to rent?

The IRS attaches FIRPTA withholding to disposition rather than to the collection of rent: "The disposition of a U.S. real property interest by a foreign person (the transferor) is subject to the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA) income tax withholding."

It also keeps the two regimes formally apart. Of NRA withholding it writes: "In referring to NRA withholding in this area, it does not include withholding done under section 1445 of the Internal Revenue Code, dealing with Withholding of Tax on Dispositions of U.S. Real Property Interests (FIRPTA) …" Renting and selling are addressed under different Code sections; a qualified tax professional can read both against an owner's plans.

Does this page cover Florida state or local taxes?

No. Everything above is United States federal tax as the IRS publishes it; Florida state and local taxes, and the local rules on how a property may be used, sit outside the sources used here.

In the 2025 Florida Statutes, Part II of chapter 83 (Residential Tenancies, ss. 83.40-83.683) provides that "This part applies to the rental of a dwelling unit" (§83.41), and one of the five exclusions listed in §83.42 is "Transient occupancy in a hotel, condominium, motel, roominghouse, or similar public lodging, or transient occupancy in a mobile home park" (§83.42(3)). For that part, “Transient occupancy” means "occupancy when it is the intention of the parties that the occupancy will be temporary" (§83.43(18)). Whether a specific property may lawfully be rented short-term has to be verified for that property, with a Florida attorney.